The chief executive officer of a mobile aggregating business and five others were accused of defrauding customers by charging tens of millions of dollars for unsolicited text messages with horoscopes, celebrity gossip and trivia.
Darcy Wedd, the CEO of a mobile aggregator that wasn’t identified by prosecutors, was charged in an indictment filed in Manhattan federal court. Wedd and Erdolo Eromo, the company’s senior vice president, were accused of engaging in a two-year scheme that used a practice known as “auto-subscribing” to send mobile phone users unauthorized text messages.
While customers typically deleted the messages believing them to be spam, they nevertheless were unwittingly billed for the services, prosecutors said. The scheme affected hundreds of thousands of consumers and the defendants used the funds to pay for lavish lifestyles that included gambling and expensive vacations, according to the U.S.
Wedd and Eromo were sued in July by the U.S. Federal Trade Commission in Los Angeles federal court over claims they participated in a scheme to place unauthorized charges on consumers’ mobile phone bills for messages about horoscopes and romantic advice. Wedd was identified in the FTC complaint as the owner of Los Angeles-based Phwoar LLC.
All six are charged with one count of conspiracy and wire fraud, which both carry prison sentences of as long as 20 years, prosecutors said. Wedd and Eromo were also charged with conspiracy to commit money laundering, which carries a maximum prison term of 20 years.
“We are disappointed by the decision, we disagree with it, and we will do our talking in court,” Michael J. Proctor, a lawyer for Eromo, said in an e-mail.
Brian A. Sun, a lawyer who represents Wedd and Phwoar in the FTC case in Los Angeles, said they’re disputing the regulator’s allegations. He said Maurice Sercarz is representing Wedd in the criminal case. Sercarz didn’t immediately respond to a voicemail message after regular business hours Monday seeking comment on the case.
The case is U.S. v. Wedd, 15-cr-00616, U.S. District Court, Southern District of New York (Manhattan).